PERTH (miningweekly.com) – ASX-listed Chinalco Yunnan Copper Resources is being tempted to participate in the African resources sector by shareholder Yunnan Copper Industry (YCI), which is seeking copper processing and mining opportunities in the Democratic Republic of Congo (DRC).
Chinalco said on Tuesday that YCI, which held a significant joint venture interest in a copper smelter in Zambia, had dedicated significant resources to identify various copper mining and processing opportunities in the DRC.
The Chinese firm had identified a smaller-scale operation that could form an initial cash-flow-bearing foundation for future expansions into other activities and an agreed transaction was expected in the coming weeks.
YCI was also well advanced in the preparation of a feasibility study for the construction and operation of a 10 000 t/y solvent extraction and electrowinning copper cathode production facility in the Katanga region of the DRC, designed to process certain copper ores that are currently being stockpiled.
It was estimated that the study would be finalised within two to three months, with copper ore supply agreements to be negotiated and concluded in the meantime.
With this work already being done, YCI has invited Chinalco to participate in opportunities in the DRC, with Chinalco expected to undertake the negotiations and obtain the approvals required for the DRC projects.
Chinalco said YCI would not charge it a fee, with the intention that all of Chinalco’s shareholders would benefit from the involvement in the DRC assets.
Subject to binding agreements being reached, Chinalco was hoping to implement the transactions as soon as possible.
“While Chinalco may have itself identified the significant potential that appears to exist in the DRC, we simply did not have the resources, in terms of personnel, financial and general logistical know-how to pursue them in a meaningful way,” said Chinalco MD Paul Williams.
“YCI has presented Chinalco with the near-term ability to benefit from its own pursuits in the DRC and to put Chinalco among some very large mining companies in a highly prospective region for future copper production.”
Williams said the Chinalco board intended to take full advantage of the opportunity for the benefit of all shareholders.